Collins | How Social Media Disrupts The Collections Process

Mary Collins

Writer Suzanne Massie taught then-President Ronald Regan the Russian proverb that translates to “Trust, but verify.” That saying should be top of mind when using social media for credit investigations or collections activities.

Just as with other fields it has touched, social media has been a disruptor for traditional credit practices. Today’s savvy credit and collections professionals know that sites including LinkedIn, Twitter and Facebook can provide real-time, up-to-date information not always included on financial statements or credit applications.

“As you may have already learned,” says Mary Seymour, a partner in law firm Lowenstein Sandler LLP, “social media sites can help you find details about customers’ financial status, corporate structure as well as their suppliers and customers.” Seymour’s comment is included in an article she wrote for The Financial Manager (TFM), the member magazine for Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association.

Social media sites can also provide clues about the status of a client’s research and development efforts, names of potential references that were not listed on the client’s credit application, as well as recommendations and complaints. In total, these sites can be a smorgasbord of information.

Seymour also points out that social media can be used “to verify information contained on a customer’s credit application — or to pinpoint when something they’ve written doesn’t quite ‘add up.’ ” She goes on to say that, gathering information from social media sites may prove to be more cost-effective than running traditional credit checks.

Search engines are what Seymour calls a “cousin” to social media. Simply entering the client’s name provides quick access to “current news, articles, press releases and other information that you may not otherwise be able to obtain.” Google alerts are a free tool from the search engine that can be set to provide real-time updates about current or potential clients.

Notes Of Caution

There are some potential downsides to all this free information. Seymour first warns that users need to be aware of the terms and conditions from the social media sites from which they are mining information. She says sites with publicly available information, like Facebook and LinkedIn, that is, sites with information that can be seen by anybody, “appear to be permissible.”

However, she cautions users of such information to consider carefully its accuracy and to try to verify it with contacts at the company being researched. Certainly, it’s not unheard of for someone to exaggerate facts and other statements on these sites.

In fact, “all social media platform providers disclaim any responsibility for verifying user-generated or user-provided content and information.” All of these disclaimers can be found in the sites’ terms of use and privacy policies, so take heed and do your homework.

In the already busy life of a credit and collections professional, this added scrutiny of social sites is “time consuming,” Seymour notes. And in the end, may not yield any significant information.

Special Cautions When Using Social Media For Collecting On Past Due Accounts

All credit and collections personnel should familiarize themselves with decisions from the Federal Trade Commission, one of the governing bodies ruling on debt collection compliance, before turning to social media to speed the process. A blog from the group Rocket Receivables explains that, while the Fair Debt Collection Practices Act FDCPA) doesn’t specifically prohibit the use of texts or social media to go after past due accounts receivable, “recent FTC law enforcement actions suggest that using them can present particular compliance challenges.”

Both Seymour and the Rocket Receivables blog point to some actions that could result in significant fines:

• Never “friend” someone from a company whose account is past-due to get access to information only available to “friends.”
• Do not pretend to be someone else to get the person to respond to you. For example, do not set up a fake Facebook account in the name of a target’s friend or coworker as a way to open communications.
• The FTC prohibits revealing the existence of a debt to third parties. Never publicly post information on a customer’s site, or on social media such as Twitter or Facebook, about a delinquent account. Not only does it violate the rule about revealing the existence of debt to third parties, it raises the risk of slander or libel allegations.
• Communications between a debt collector and a consumer require specific disclosures. The FTC doesn’t buy the argument that such disclosures are difficult to include in texts or other social media. Such communication must also be fair and honest. The commission has ruled against companies that have used so-called deceptive “door openers” or texts that mislead the consumer to get them to contact the person who sent the message.

Seymour offers one last rule of thumb: “If you wouldn’t print something on the front page of tomorrow’s newspaper, don’t post it publicly on a customer’s Facebook or Yelp Page.” And as I offered at the beginning, when using these sites, trust but verify.

Mary Seymour’s article, entitled Social Media Sleuthing, is a follow-up to a presentation she did for MFM and BCCA members who attended last fall’s Media Outlook 2019. The complete article is included in the March/April 2019 issue of TFM. An electronic copy of the issue will be available on the MFM website soon.

For More Information

Scheduled sessions for this year’s Media Finance Focus 2019, the 59^th annual conference for MFM and its BCCA subsidiary, include a more in-depth look at issues for both order-to-cash professionals and those that can affect media finance professionals in general.

The conference, themed Big Ideas in the Big Easy, will be held May 20-22 at the Hilton New Orleans Riverside in New Orleans. Ralph Bender, CFO, Manship Media is the conference chair, and Melissa Mitchell, corporate controller Bonneville International, is the conference co-chair. Complete information, including a preliminary agenda, can be found on the conference website — www.mediafinancefocus.org.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at [email protected] and via the association’s LinkedIn, Twitter or Facebook sites.